World Bank Projects Thailand's Economic Growth to Accelerate to 2.4% in 2024

Inflation is forecasted to decline to 0.7% in 2024, down from 1.3% in the previous year, attributed to lower-than-expected food and energy prices and a gradual recovery pace.

Thailand's economic growth is expected to accelerate to 2.4% in 2024, driven by sustained consumer spending, the recovery of the tourism industry, and a rebound in exports, according to a new report by the World Bank. This projection, however, marks a 0.4 percentage point downgrade from earlier estimates due to weaker-than-expected exports and public investment earlier in the year.

Inflation is forecasted to decline to 0.7% in 2024, down from 1.3% in the previous year, attributed to lower-than-expected food and energy prices and a gradual recovery pace. It is expected to rise slightly to 1.1% in 2025.

Tourist arrivals are predicted to surge to 36.1 million in 2024, up from 28.2 million in 2023, approaching pre-pandemic levels. Total arrivals are expected to reach 41.1 million in 2025, surpassing pre-pandemic figures as Chinese tourists return in greater numbers.

Economic growth is projected to reach 2.8% in 2025, supported by stronger domestic and international demand and increased government spending. While public debt is expected to remain sustainable, the government faces increasing pressure for social spending and public investments to support an aging population.

“Thailand is at a pivotal moment needing to address key challenges including productivity and a decline in the working population due to an unfavorable demographic trajectory," said Fabrizio Zarcone, World Bank Country Manager for Thailand. "As the clock ticks, it will be critical to rejuvenate its economic growth and Thailand’s secondary cities hold significant untapped potential that is key to getting the country back on the path of sustainable development."

The report emphasizes the potential of Thailand’s secondary cities in bolstering future growth. The economic vulnerability exposed by the 2011 floods in Bangkok highlights the need to diversify growth across multiple urban centers. Secondary cities, already regional economic hubs with diverse industries, have seen per capita GDP growth nearly 15 times higher than Bangkok in recent years.

With appropriate investments in infrastructure, human capital, and institutional capacity, these cities can significantly enhance Thailand’s productivity and economic growth. The report recommends decentralizing investment decisions and granting greater fiscal autonomy to cities.

"Empowering Thailand’s secondary cities would be a significant paradigm shift so that they have the powers, flexibility, financial resources, and infrastructure they need to attract their share of investment and talent," said Poon Thingburanathum, Deputy Director of Corporate Planning at Thailand’s Program Management Unit on Area-based Development. “With appropriate investments and adjustments to the intergovernmental framework, these cities have the potential to significantly enhance Thailand’s productivity, spur economic growth, and bolster global competitiveness.”